Pfizer CEO: Wyeth merger will bring what's needed

Jeffrey Kindler, chairman and CEO of Pfizer, speaks at a news conference Monday, Jan. 26, 2009, in New York. Eager to dispel doubts about the difficulties of executing Pfizer Inc.'s $68 billion tie-up with Wyeth, Pfizer's CEO said it will be done more like microsurgery than just stitching two huge corporations together. (AP Photo/Mark Lennihan)
— AP

Jeffrey Kindler, chairman and CEO of Pfizer, speaks at a news conference Monday, Jan. 26, 2009, in New York. Eager to dispel doubts about the difficulties of executing Pfizer Inc.'s $68 billion tie-up with Wyeth, Pfizer's CEO said it will be done more like microsurgery than just stitching two huge corporations together. (AP Photo/Mark Lennihan)
/ AP

TRENTON, N.J. 
Eager to dispel doubts about the difficulties of executing Pfizer Inc.'s $68 billion tie-up with Wyeth, Pfizer's CEO said it will be done more like microsurgery than just stitching two huge corporations together.

Jeffrey Kindler has spent two years transforming Pfizer into smaller, entrepreneurial research and marketing business units, making the companies easier to combine, he said in his first in-depth interview since the deal was unveiled Jan. 26.

"We could not have done a deal like this a year ago. The company wasn't strong enough yet," Kindler told The Associated Press. "We had to get our cost structure in line," bring in the right leaders and reduce bureaucracy.

Kindler, 53, a Harvard Law School graduate and former McDonald's Corp. executive, said his team made changes faster than anticipated.

The need for speed was obvious, with more than a quarter of revenue coming from cholesterol fighter Lipitor, the world's best-selling drug. Generic competition will slash its $13 billion in annual sales soon after its patent expires in November 2011. With that looming, Pfizer had to undertake changes inside and out.

Internally, Pfizer has set up research units in single locations, focused on one therapy area, each with its own chief scientific officer who decides which experimental compounds advance into risky and expensive human testing. It's also cut the number of areas in which it does new research.

Like competitors, New York-based Pfizer has been eliminating jobs steadily; it just began another round of nearly 8,200 cuts.

The knife will come out again after the Wyeth deal is completed late this year, but Kindler said "each of those units can conduct an integration that is much more manageable in size and scope than if you were just looking at the entire two companies."

He's already working with Wyeth's CEO, Bernard Poussot, who is staying on through the transition to help with decisions about which workers and research programs remain, and what happens to spl ecific facilities, including Wyeth's posh campus in Madison, N.J.

With many workers worried about getting pink slips in the worst economy of their careers, Kindler said he's concerned about morale but that staffers know changes are unavoidable.

All the recent changes give him "confidence that we're going to be able to integrate this transaction much more effectively and much more quickly than was done in the past," Kindler said.

Two previous mega-acquisitions dragged out but helped Pfizer leapfrog to the world's biggest drugmaker: buying Warner-Lambert Co. in 2001 and Pharmacia Inc. in 2003.

"We certainly made some mistakes in the way we integrated those two large organizations," said Martin Mackay, who as president of Pfizer Global Research & Development oversees its current 14,300 employees.

He said Thursday Pfizer learned important lessons, particularly how to keep up productivity in research.

"Programs that are in the late-stage development, essentially don't touch them at all," Mackay said.

He noted that Pfizer shifted to its current business-unit model last year but still increased the number of drugs in late-stage human testing from 16 to 26.